Month: July 2014

Driverless, autonomous vehicles have been gaining a lot of attention recently – whether that be through Google claiming it will build its own prototype autonomous vehicles before existing automakers reach that milestone; or Daimler AG announcing it will roll out a commercial truck by 2025 that will be able to steer, brake and accelerate without a human driver behind the wheel. Then there’s Cruise Automation, a startup company that says it will roll out a $10,000 aftermarket driverless device that so far is only suited to operate on Audi A4 or S4 vehicles.

So what gives? Can we expect to see lots of driverless, autonomous vehicles on our roads within the next 10 years?

As far as state legislatures are concerned, four of them have already passed bills allowing autonomous vehicles to eventually make it to their roads – Nevada, California, Florida, and Michigan, plus the District of Columbia. It’s under consideration in 11 states – Hawaii, Washington, South Dakota, Minnesota, Massachusetts, New York, New Jersey, Maryland, South Carolina, Georgia, and Louisiana. And it’s failed in seven states – New Hampshire, Texas, Oklahoma, Colorado, Arizona, Wisconsin, and Oregon.

It was fascinating to see Google initially test its driverless car technology on a converted Toyota Prius hybrid. Nissan rolled out its driverless test model in a Leaf electric car. AutoTrader.com analyst Michelle Krebs thinks that driverless cars long-term will be like hybrids and electric vehicles (EVs) – they won’t take over completely but will play a role in how automakers and government officials are looking at the future of transportation. “There are certain places this approach makes sense, such as heavy commuting cities where autonomous cars could run essentially like train cars without a track — mass transit. That makes brilliant sense. Or these cars could be programmed to handle most responsibilities on long, boring drives, including commutes. In those ways, they will extend the mobility of aging baby boomers, which is where the biggest market is, if you believe that Millennials really don’t want to drive,” Krebs told Forbes.

For those autonomous vehicles that do sell in the future, Krebs thinks they won’t be driverless only. They’ll be “cars you have the choice to drive or not drive. There are so many legal and insurance and regulatory issues, and none of them are being resolved.”

There are some big questions that need to be answered in the next decade for autonomous, driverless vehicles to take off:

If there’s a collision involving a driverless car, who will be liable? The car owner? The automaker? The state government? The insurance company? Will liability be doled out and shared by all the above?

Then there’s the American civil liberty tradition. Will “big brother” be breathing down our necks? How much personal privacy will citizens have in the future?

I estimate that driverless, autonomous passenger and commercial vehicles will make up a large share of sales in the next 25 years – up to 25% of new vehicles sold in the US. Here are a few market forces that could shape that trend:

Traffic congestion is getting worse all the time – as the “urbanization” trend goes strong and more Americans work in, and live in, cities. While mass transit and bicycling are gaining a lot of support, in the end, new vehicle sales will likely stay strong for years to come and traffic congestion will be getting worse. Driverless, autonomous vehicles seem to have the best shot at dealing with the gridlock problem. That will require an interdependent relationship between state highway officials, DMVs, highway patrols and city police departments, automakers, and technology suppliers like Google.

Commercial truck makers are exploring the option. Along with Daimler, Volvo Trucks has been testing out autonomous solutions. Volvo has participated in the Safe Road Trains for the Environment (SARTRE) a European Commission-funded project. It’s a tested concept where several vehicles are electronically linked together in a “road train,” with only the lead driver in active control – many times a Volvo truck driver. Big rigs could play a critical role, as they do take up a lot of space on highways and have a major impact on safety and the flow of traffic.

Cars are already going in that direction. You’ve probably noticed that with every new model year, automakers brag about offering the coolest, advanced technologies with the latest in connectivity, safety, fuel efficiency, and convenience. After recently test driving a driverless car, Rep. Larry Bucshon (R—Ind.) said it was “the next generation of cruise control.” EVs are typically considered to be part of the cool technology trend – especially the Tesla Model S. For some people, driverless cars will probably be a logical extension of where all of the technology seems to be inevitably headed.

The perks will be getting better all the time. If you ever own a driverless car, there will be several benefits gained. For one, the former-driver-now passenger could do something else besides drive the car – play video games, watch a “Breaking Bad” episode, finish up some work, read a mystery novel, or talk to their significant other over a two-way TV screen. Car commuters will become more like train passengers, feeling more relaxed and replenished when they come home. There’s also the likelihood that riding in a vehicle will become safer as more and more of them become automated and driverless. Then there’s improved fuel economy, as these automated vehicles will probably drive routes and speeds based on efficiency. Best of all, gridlock will probably recede as driverless systems place vehicles at peak performance in speeds driven, braking, lane changes, fluctuations tied to weather conditions, and other factors eliminating human error. Cars will be interconnected and can communicate with each other, making traffic smoother and safer.

Not long ago, the market values of used hybrid electric vehicles, especially the Toyota Prius, were very strong. It made for optimistic trend forecasts on increasing sales of new hybrids and strong retention values – making them all the more appealing to consumer and fleets. More recently, used vehicle values have been softening on hybrids. Other green vehicles are still up in the air, such as plug-in electric vehicles and natural gas vehicles. NADA Used Car Guide has covered these topics in-depth lately.

NADA Used Car Guide’s Perspective edition for June covered the topic of used hybrids. Here are a few highlights of the report along with what’s been happening with natural gas trucks…….

Hybrid electric vehicles have been seeing decline in US new vehicle sales. Hybrid share of total new vehicle sales went from 3.1% of all new vehicle sales down to 2.9% this year. That’s the first non-production related decline since 2010, according to NADA.

The Toyota Prius is feeling it harder than the market’s overall 10% drop in hybrid sales this year. Year-to-date, Prius sales are down 19%, while deliveries of the smaller Prius C were only down by 1%.

Roles reversed between the Prius and the Toyota Corolla. In 2013, the one-year old Prius saw its retention fall to 70%, three points lower than the Corolla’s 73%; as for this year, the Corolla’s retention has been 75%, six points above the Prius’ 69%. The Prius has always been the bellwether symbol of hybrid performance – it’s likely to influence other valuation analyses for other hybrids.

Gasoline price spikes in 2008, and periods of price increases at lower levels and for shorter periods since that year, boosted sales of new hybrids and strengthened their resale values. But more recently, improvements in fuel efficiency of internal combustion engines (I CEs) and stabilized gasoline prices have softened demand for hybrids. Hybrids usually cost more than fuel efficient gasoline-engine cars, making them less appealing to many car shoppers. As automakers gear up for ambitious fuel economy targets and car shoppers remain interested in better mileage, fuel efficient cars and crossovers are doing well in new vehicle sales and used vehicle value retention.

With more natural gas trucks showing up in the commercial vehicle market, NADA’s used truck report devoted a section to resale value trending. The report said that natural gas trucks are starting to show up in the secondary, used vehicle market; however, it’s still too early to tell much about their used vehicle performance. There’s yet to be a published benchmark yet for comparing commercial truck resale values to past model years. This has influenced buyers and lenders to be more hesitant about natural gas truck acquisitions, according to the report.

Owners of hybrids, natural gas trucks, plug-ins, and other alt-fuel vehicles, will need to have a comprehensive lifecycle analysis. For consumers and fleets, the overall reasons for acquiring hybrids or other green vehicles will need to make sense compared to ICEs – even if their resale value is lower (or their residual value for lease holders, which are many times OEMs and their captive finance companies). Fuel efficiency, reduced emissions, environmental gains, and lower maintenance costs for hybrids and EVs may still be sizable enough to offset their used vehicle value retention loss.

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

1. Workplace charging and Plug-In 2014 conference
Workplace charging has become the most discussed topic in the plug-in electric vehicle (PEV) infrastructure community. Check out comments from Electric Power Research Institute’s Morgan Davis on some of the issues that will be discussed next month at Plug-In 2014 in San Jose, Calif. Scheduled speakers from Google, SAP, Nissan, Georgia Power, and San Diego Gas & Electric, will talk about their experience with deployment of workplace charging stations. Other topics being explored at the conference include: the future of DC fast charging; PEV incentives and economics; the latest in vehicle technology; and, two pre-conference seminars: vehicle-grid integration and fleet implementation of PEVs.

2. Audi enters the plug-in space with A3 Sportback E-Tron
Audi AG began rolling out its A3 Sportback E-Tron plug-in hybrid model; it’s the first of four plug-in hybrids that will roll out and compete with BMW for luxury electric vehicle customers and its first-ever plug-in model (and eventually with Tesla as it increases its presence in Europe). The A3 Sportback E-Tron is said to get 31 miles of battery power. There is a price – it starts at 37,900 euros ($51,700) in Germany – 15,100 euros more than the base gasoline-powered version of the A3.

3. US Supreme Court stays out of California low-carbon fuel standard ruling
The US Supreme Court has decided to let stand a ruling from September by the 9th circuit court of appeals in San Francisco upholding the California low-carbon fuel standard – at the chagrin of out-of-state ethanol producers and oil companies. Ethanol producers from the Midwest challenged the fairness of the rule, as their fuel is given higher cost to buyers due to the state’s “carbon-intensity ratings.” California’s rating system is giving out-of-state producers a higher price for their credits than identical fuel being produced in California. Oil refiners also challenged the standard’s premise that the cost of transportation and processing for bringing the fuel into the state is adding more carbon. California Air Resources Board recently approved a funding of $200 million in the 2014-15 budget to encourage the deployment of more low-carbon transportation choices. Rebates of $2,500 for battery-electric vehicles and $1,500 for plug-in hybrids will be available; fuel-cell electric vehicle buyers will be eligible for $5,000 rebates.

4. Longer wait expected for next-gen Prius
Toyota Motor Corp. has decided to delay the launch of the fourth-generation Prius until December 2015 instead of next spring. The automaker hasn’t announced reasons for the delay, but those familiar with the matter confirmed the delay; one of them said Toyota engineers are trying out various configurations to improve fuel economy including adjusting the body and chassis. Production of the plug-in Prius may take even longer – sources say that will begin in October 2016. Also, more details have been announced on its first-ever hydrogen fuel cell vehicle. It will debut in the Japan market next April for around 7 million yen ($69,348); it will go on sale in the US and Europe by the summer of 2015, according the company.

5. Pennsylvania takes action on Tesla corporate stores and sets limits
The Pennsylvania Senate unanimously passed a bill last week after it was amended to cap the number of factory-owned stores allowed at five. The bill only applies to Tesla Motors and goes now to the Pennsylvania house. The original bill had no cap on the number of retail outlets that Tesla could have set up; that drew pressure on the state from the Alliance of Automobile Manufacturers, the major trade group representing 12 automakers but not Tesla.

6. SAP and Cox Enterprises add to their corporate sustainability campaignsSoftware giant SAP will is taking a three-prong approach to promote sustainable driving behavior: economic incentives for employees to lease electric vehicles; bringing in a new app from Toyota and Verifone that will get them by dashboard of mobile device to determine fuel levels, get to the closest gas station, authorize electronic payments, and receive personalized coupons; and in collaboration with Volkswagen, SAP will try out a pilot project that uses SAP’s mobility and cloud services that will help drivers locate parking and nearby food offerings in urban settings. Cox Enterprises (which owns Manheim Auctions, AutoTrader, and Kelley Blue Book) is utilizing an energy storage system at its Manheim Southern California auction location in Fontana, Calif. An 18 kilowatt PowerStore system provides the location with real-time data analytics that are used to optimize efficiency and reduce electricity costs. Since 2007, the Atlanta-based company has prevented approximately 120,000 tons of carbon from entering the environment and saved more than 125 million gallons of water.

7. Greenlots will bring open standard DC fast chargers to San Francisco AirportGreenlots will install four open standards-based DC fast chargers at the San Francisco International Airport; it’s part of a two-year pilot program supported by the California Energy Commission through the Bay Area Air Quality Management District. The chargers will be part of its “Sky” electric vehicle charging platform that utilizes Open Charge Point Protocol (OCPP), the largest open standard for charger-to-network communications. Sky “obsoletes the subscription-based model by providing drivers with flexible payment solutions including dynamic queuing and pay-by-phone,” the company said. The charging station host can mix and match charging station types, while setting pricing options: by kilowatt-hour, session, or length of time charging.

8. Minnesota starts 10% biodiesel blendMinnesota has become the first state to require that a minimum blend of 10% biodiesel be sold in diesel fuel sold at retail fuel station pumps. Biodiesel sales are expected to jump from 40 million to 60 million gallons per year through the new Minnesota standard. That will bring three production plants in the state up to their capacity to make biodiesel that’s typically coming from soybean and other oils.

9. Ford bumps Toyota off on greenest automaker list
While Ford is getting chastised for again overstating its mileage ratings, Interbrand has been impressed enough with the global automaker to name it the world’s greenest brand. Conducted with Deloitte Consulting, the annual survey (taken long before the latest MPG controversy) gauges consumer perceptions in markets around the world, combined with data on how companies operate internally and report their environmental behavior.

10. Zap Jonway electric cars going on sale as Urbees in ChinaZap Jonway, an electric vehicle manufacturer headquartered in Santa Rosa, Calif., received from SunRa (which is also called Xinri Electric Vehicle Company) a volume purchase agreement for its Urbee electric car through its subsidiary Jonway Auto for the Chinese market. It’s an agreement by SunRa to purchase 1,000 Urbees per month from Jonway Auto to sell through its distribution network in China, starting with the first shipment of 500 units from Jonway Auto’s production line in June 2014.

For those of you reaching out to consumers (and fleets) with interest in “green” issues like air quality, fuel efficiency, recycling, and protecting natural resources, you may want to consider the Earthgarage Certified Dealer program. The Shelton Group, a market research firm, has reported that the greenest consumers make up 24% of Americans. They make for a very desirable target audience – affluent, early adopters, and the most brand-loyal segment. They prefer to purchase greener products from greener companies.

Green Automotive Alliance yesterday announced the Earthgarage Certified Dealerprogram, which helps independent repair shops and tire dealers service the environmentally-savvy driver – and provides them with a good opportunity to stand out in the marketplace. It’s a win-win for customers – selecting repair shops that have joined the Earthgarage Certified Dealer program can offer consumers a lineup of aftermarket parts and services that have a lower impact on the environment and save money on routine maintenance.

The program includes branding, marketing support, and staff training. “We’re changing the way drivers think about maintaining their car,” said Bob Inzitari, Store Manager at Karl Auto Service in Greenwich, Conn., “being green also means you can save money, too.”

Customers also have the option of choosing environmentally responsible products to service their vehicles. One of them is G-Oil, the first bio-based motor oil; it’s synthetic oil with carbon emissions two-thirds lower than conventional motor oil. Another aftermarket product being offered is the micoGreen oil filter that extends oil change intervals out to 30,000 miles; it comes with a patented filter technology that makes for cleaner, longer lasting oil.

Green Automotive Alliance recently revamped its website, Earthgarage.com. The site offers pertinent information on products and resources that help motorists improve gas mileage, reduce emissions and lower the environmental impact of their vehicle.

The revised website also includes a store locator for participating Earthgarage Certified Dealers. “The Earthgarage Certified Dealer program allows independent shops to stand out in a crowded marketplace,” added Bob Leonard, CEO of Green Automotive Alliance, the marketing company that developed the program.

Check out the “Give Water a Brake!” campaign on the Earthgarage website, which seeks to ban copper in automotive brake pads. Every time a driver steps on the brake pedal while driving, copper in the form of brake dust is worn off the pads. This eventually winds up in the environment, contaminating our precious water resources. As Colors on Parade has discovered, choosing environmentally responsible standards and practices is paying off with customers and regulatory agencies such as the US Environmental Protection Agency. Regulatory compliance gets companies to save money by switching over from solvents to waterborne auto paints. Offering clean waterborne paint, and making the process more efficient than it had been in the past, is gaining a lot of traction, the company said. Consumers and fleets like to stay informed on these issues, so the Earthgarage Certified Dealer program may meet their financial goals and could be inspiring for many of them concerned about eliminating copper that wears off brake pads and damages the environment.

While working out of Automotive Digest’s home office in Manhattan Beach, Calif., I had to compete with the World Cup game for Chuck’s attention to get some business done last week. He loves the game, and that only happened very recently – which led to us having a conversation about the significance of soccer’s global popularity and what it could mean for the United States.

The 2014 FIFA World Cup Brazil has reached record numbers of TV viewers across the world; it has had breakthrough performance in the US and progress in Europe, Asia, and the rest of the Americas. “The United States’ 2-2 World Cup draw with Portugal is almost certainly the most-watched soccer match ever in the U.S., an emphatic confirmation of the sport’s rising popularity in a country slower to embrace it than the rest of the world,” according to CBS News.

It probably helps that the popularity of soccer has been increasing since about the 1970s – with much of that coming from more young people playing the game on high school teams and college soccer clubs; professional soccer hasn’t taken off in the US anywhere near the audience and revenue model being brought in by football, basketball, baseball, or hockey, but’s its likely to see growth in popularity in the near future.

Chuck Parker sees a strong relationship between the popularity of soccer and global social and economic trends. For anyone working today in clean transportation – and renewable energy and other cleantech industries – the World Cup points to an interesting social trend well worth paying attention to……

Soccer represents team cooperation more than fierce competition. It’s a fairly slow, low scoring game that probably bores fans of football and other fast, high-impact games. For soccer fans, it becomes hypnotizing, muck like watching a baseball pitcher face off against a great batter. Economic analysts and management professors tend to recommend adopting the cooperation model over competition as essential for economic growth and global stability.

It’s a nonviolent game with low injury rates and long-term careers for players. That’s very different than other sports popular in the US like football, hockey, cage fighting, boxing, or wrestling, where the injury rates tend to be high and the average lifespan of the player is much shorter than soccer.

The World Cup brings recognition and awareness to nations in Central and South America, along with Europe and North America – especially the hosting nation. As the economy continues globalizing, and joint ventures and mergers continue, the economic and military domination by the US and Europe is softening. Developing nations like Brazil, China, India, and others will play a leading role in technology developments and alliances. Global automakers know this well and are setting up shop and partnering with other OEMs. Hyundai-Kia and automotive supplier Continental are top sponsors of the 2014 FIFA World Cup Brazil. They’re counting on soccer fans being impressed and loyal to their brands.

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Jon LeSage serves as Editor and Publisher of Green Auto Market, which tracks the business of green cars, fuels, and technologies. Jon also serves as Automotive Editor, Green Initiatives at Automotive Digest. He’s passionate about – obsessed! – with this burgeoning global industry that has huge geopolitical, environmental, energy, and economic issues hovering around it.